Speaker 1: Last week, Chinese company DeepSeek shocked the world when they walked right over OpenAI's moat by releasing the open-source R1 model. Not only does it beat their $200 O1 reasoning model, but it also beats CloudSonic and Gemini. It wins on key benchmarks, but more importantly, it passes my vibe test along with many others on the internet, as long as you don't ask it what happened on April 15th, 1989. R1 even wins at math, which is crazy considering OpenAI had the answers in advance. Over the last few days, Normies have been learning about R1, and it went viral to become the number one app in America. This is a big problem for big tech, because in order for the grift to keep on grifting, artificial intelligence needs to be hard and take thousands of GPUs to pull off. But DeepSeek R1 cost less than $10 million, and was actually the side project of a hedge fund, where their only goal is to create long-term social value. Wall Street is terrified, and Nvidia's stock is in for a bloodbath today. Nvidia has been the primary beneficiary of the AI boom, but the whole bubble just got one-shotted by a brutal reality check. In today's video, we'll find out how DeepSeek just changed the course of history. It is January 27th, 2025, and you're watching The Code Report. Big tech is literally shaking right now. Sam Altman coped with the dramatic tweet. A revolution can neither be made nor stopped. The only thing that can be done is for one of several of its children to give it direction by dint of victories. I'm not sure if that's Napoleon Dynamite or Napoleon Boner part, but the funny thing is he damn near got ratioed by someone with an anime profile picture that said, it's not that deep, bro, just release a better model. In addition to try to remain competitive with DeepSeek, OpenAI is also offering its O1 mini model to free users. But that's not all. They also released a new thing called Operator, which gives AI access to a browser, and allows it to click on buttons and fill out forms on your behalf, which is a game-changer, because that means you can have ChatGPT go attend your court-appointed DUI courses, or anything else you might have to do online. In the future, humans will no longer need websites or UIs, only APIs that can interact with the AIs. Operator is currently only available to people on the $200 plan, and overall it gets pretty mixed reviews. That's cool and all, but the Chinese are really crushing it right now. DeepSeek is one thing, but they also released this thing called Hanyuan 3D, which can generate 3D meshes and textures, and that's huge for people like me, who have spent years failing to get good at Blender. But the crazy thing about DeepSeek is that it was just a side project that cost very little money to produce. Even Marc Andreessen called it one of the most amazing and impressive breakthroughs he's ever seen, a profound gift to the world. And because of that, the stock market is panicking, and just wiped out nearly a trillion dollars in value, with NVIDIA being the biggest loser, followed by other chip companies like Taiwan Semiconductor and Broadcom. You see, NVIDIA's had basically a monopoly on AI training for the last decade, because they have better Linux drivers than AMD, and all the machine learning algorithms are optimized for libraries like CUDA, which is proprietary and can only run on NVIDIA GPUs. And they have the infrastructure to connect all these GPUs together at scale. As AI models get bigger and more popular, so do the profits of NVIDIA. But someone got DeepSeek running on a few Apple M2 Ultras, and that's the 680 billion parameter top-of-the-line model. And that's terrifying if you're a tech investor pouring billions of dollars into AI, because if the best state-of-the-art model can operate on relatively cheap consumer hardware, and it's free and open source and developed in China, how are we going to make any mother-effin' money? People are calling this the Sputnik moment. When Russia launched the first artificial satellite into space in 1957. The United States was shocked at the time, and it took over a decade to make a comeback, when America made its pinnacle achievement of filming a man on the moon in Nevada. That's a joke, of course, and even the smartest technology in the world, DeepSeek, believes in the moon landings. We had a good run on this AI hype train, but now it's time to move on. I'm looking forward to brain chips, quantum computers, artificial meat printers, nanorobots, digital resurrection, and all kinds of other tech that will make the world a better place. This has been The Code Report. Thanks for watching, and I will see you in the next one.